But suppose that $111 million had remained in the private sector and not been confiscated by the federal government.How many jobs might have it created?

Let’s build a hypothetical.

For the sake of illustration we’ll look at a number of small businesses, each doing $5 million in sales.And, we’ll assume each has a before tax profit of 15%, or $750,000.

Also, these small businesses are Sub-Chapter S corporations with their income reflected on the owners’ personal tax returns.Each business would fall in the 35% bracket and pay $262,500 in federal income taxes.

Therefore, the $111 million wasted in Los Angeles equates to the income tax paid by 423 small businesses using the assumptions above.

Without making this example more complicated (where a CPA would be required), we’ll assume that these small businesses were given an income tax holiday for a year.Each owner would have an additional $262,500 to invest in his/her business.

If they use $100,000 to buy new equipment, increase inventories, etc. (which would indirectly add jobs, but we won’t count that), $162,500 could be used to hire new employees.At $50,000 per employee (wages, taxes, benefits), each business could hire about 3 new employees.

423 small businesses X 3 new employees each = 1269 new employees.

Final Score:

New job creation when wealth is left in the private sector:1269

New job creation when private wealth is seized by the federal government, strained through multiple levels of bureaucratic inefficiency and redistributed by a command-and-control, politically motivated regime:55